Hon Murray McCully MP
National Party Foreign Affairs & Trade Spokesman

21 February 2006

Speech to NZ Institute of International Affairs Victoria University

I appreciate the opportunity, at this very early stage of the current parliamentary term, to share with you some thoughts regarding the future direction of New Zealand foreign policy.

Your forum aims to look at New Zealand’s foreign policy directions for the next five years.

I can tell you that my colleagues and I are very focused on providing the leadership for New Zealand’s foreign policy for the latter half of that period, and I will do my best to give you a flavour, in a non-partisan and non-political way of course, of what might change, and what might stay the same in the event of a change of government.

A few weeks ago I provided a briefing for my caucus colleagues on the directions and processes I hoped we would follow over the next two to three years, and I propose to share some of that with you today.

But I hasten to emphasise that these are the very early stages of our work programme, and we are well short of any decision-making processes. So my comments to you today are merely my own views, and nothing more than that.

My starting point in foreign affairs, trade and defence policy is that, so far as it is possible, major political parties in New Zealand should seek to present a united, non-partisan face to the rest of the world.

I have no need, in this audience, to emphasise the relatively small, geographically remote character of our country, and the extent of our dependence upon international trade.

In that light, it should be our starting point that partisan politics be set aside in the national interest wherever possible. That is most certainly the approach that I will bring to the job.

Secondly, I am an advocate for a more transparent, consultative approach, especially in relation to Defence policy.

An examination of the processes employed in defence policy formulation in Australia, Canada, and the UK reveals a much greater reliance on the publication of White Papers, or similar documents, as a basis for parliamentary and public discussion.

Since Defence is essentially the execution end of foreign policy, that opportunity for public comment and debate, in practice, spills into a wider debate on foreign policy.

Much has changed in New Zealand’s relationships with the rest of the world in recent years, and even more in the structure and focus of our defence forces. Yet we have not seen a Defence White Paper since 1997.

And the only document that could be said to have provided a vehicle for public discussion, the 1999 Quigley Select Committee Report, is entirely predicated on the assumption that there would be no increase in defence spending, in real terms, in the foreseeable future - an assumption I personally regard as open to serious challenge.

It is my ambition to persuade my colleagues that the National Party should commit, as a matter of policy, to an orderly process for the publication of foreign policy and defence White Papers, using the select committee process as a vehicle for both public and parliamentary debate.

New Zealand political and public life is notably short of debate in these areas, by comparison with other jurisdictions, especially Australia, and that is, at least in part, a result of the closed-door approach to decision-making which has prevailed in this country.

Having just expressed a desire for greater debate and consultation in government, it is my intention to follow precisely that course in opposition.

As a result, it is my ambition to consult widely in my party, the defence and foreign affairs community, and interested groups and individuals generally in the preparation of the National Party’s policy for the next election. Those of you who feel able and willing to engage with us will find your input is genuinely welcomed.

Some of you may have noticed that I have a proposal before my colleagues to simplify the National Party’s policy with regard to New Zealand’s nuclear-free legislation.

Currently, our policy is identical to that of the Government - in supporting the legislation - but it carries a rider that any future change would require some form of public mandate.

While unquestionably well intentioned, that rider has been interpreted by some as hinting at some prospect of change in the near future. For that reason I have proposed to my colleagues that we should drop it.

The current ban on nuclear powered and armed vessels enjoys the support of the bulk of New Zealanders, myself included. And it is my view that New Zealand’s interests are best served by ensuring that both major political parties share common policies on this matter.

Indeed, it is my strong personal view that the debate, much of it quite intemperate, which has accompanied the legislation is a real impediment to the important task of improving New Zealand’s relationship with the United States.

This brings me to the first major point of difference between the two major political parties.

The New Zealand National Party unambiguously desires, in the context of an independent New Zealand foreign policy, to see our country enjoy a better, more mutually respectful and supportive relationship with the United States.

It is a simple fact that our defence relationship with our closest neighbour, Australia, is constrained by our current relationship with the US and for that reason alone we should aspire to improve it.

But there are many other reasons, including some trade issues that will become increasingly important over time, why New Zealanders should wish to improve our relationship with the US.

These include the fact that we share a language, tastes in television, music, literature and the arts generally, and much of our heritage.

There are some New Zealanders, including some very senior members in the current Government, who spent too much time attending Socialist International Conferences in Nicaragua at a formative stage of their lives, who see a degree of latent hostility to the United States as an essential prerequisite to an independent New Zealand foreign policy.

They are locked in Vietnam War protest mode, and frankly they need to get over it.

In 2006, New Zealanders are sufficiently self-confident and mature of outlook to be able to express the natural friendship for the United States and its people which is the default setting of the majority of New Zealanders, while still disagreeing with US policy in Iraq or in any other theatre of difficulty around the world.

I want to acknowledge the public commitment by the incoming Minister of Foreign Affairs, Mr Peters, to improving our relationship with the United States. I am quite certain that Mr Peters was perfectly genuine in expressing that view, and my party and I will do whatever we can to assist him in that endeavour.

It was noteworthy that Mr Peters’ statement was contradicted 24 hours later by a headline in the New Zealand Herald, with the Prime Minister telling her new Foreign Minister that no such improvement in the relationship was required. That is precisely the attitude that I referred to earlier, which exerts such a negative impact on the relationship. It has been my experience, as I am sure it has been the experience of many of you, that literacy rates in Washington tend to the upper end of the scale.

As I have said, one of the important reasons for improving the relationship with the US is that it is a pre-condition, at least in part, to advancing our defence relationship with Australia.

I am a newcomer to the area of defence, but it doesn’t take too long to come to the inescapable conclusion that we should aim to have the closest of defence ties with Australia, including achieving inter-operability in as many areas as practicable.

This brings me to the difficult issue of New Zealand’s defence spending as a percentage of GDP.
Achieving greater inter-operability, over time, with Australia, which has invested heavily in high technology and expensive equipment generally, will come at a cost.

But that is not the only consideration.

There is also the wider issue of our credibility in defence and foreign policy generally.

Currently, we commit 0.9% of GDP to defence. That includes the much-vaunted $4.6 billion Defence Sustainability Initiative. It compares rather poorly with Australia’s 1.9% of GDP. Or even Canada’s 1.2%. Or the UK’s 2.3%

Now, before any of you feel a compulsion to draw my attention to the fact that the initial budget cuts in defence occurred under a National Government during the 1990’s, I will tell you that I do have some vague recollection of that.

But rather than debating the fiscal constraints of that time, and what might have happened since, I suggest it is infinitely more profitable for us to elevate the discussion beyond the usual banal political exchanges which too often characterise this debate, and focus on what we really need to spend in order to adequately protect our security interests at home, and our credibility abroad.

In any case, September 11 has changed the environment in which we must determine our defence requirements. And I wonder whether New Zealand has, since that traumatic event, given our defence and security arrangements the thorough review which is called for.

Most Australians I have spoken to on this topic have been too polite to actually use the word “freeloader” to describe New Zealand’s commitment to defence expenditure, but it is not too hard to work out that that is pretty much what they believe.

I am not, today, signalling that the National Party is about to embrace a commitment to substantial increases in defence spending. But it is futile to embark on a wider discussion about New Zealand’s future defence needs without at least the possibility of an increase in defence spending, in real terms, being on the table for debate.

And I make no secret of my own view, as a spokesman new to the defence portfolio, that the current defence budget is at the light end of the scale – as the numbers I have just quoted to you illustrate - for New Zealand to meet its direct defence requirements in this region, or to be truly credible in the eyes of those we regard as our partners and friends.

Many of you will have heard the Leader of the National Party, Dr Brash, lament the growing gap in relative average income levels between New Zealanders and Australians, and the consequent growing tide of talented, able New Zealanders across the Tasman – an average of over 660 per week at last count.

While that trans-Tasman relationship is undoubtedly in good heart, and while the regular prime ministerial and ministerial meetings are useful, I cannot help but feel that there is a need for us to attempt to shift gear in the relationship, and that doing so will be an important part of an overall strategy of improving our level of economic growth.

There is much for New Zealand to gain from moves towards a single trans-Tasman marketplace, not least, a closer benchmarking by New Zealanders and New Zealand businesses of their own performance relative to the performance of their Australian counterparts.

If we are to bring a new impetus to the relationship with Australia, I see this as a process that will be driven ministerially, not particularly by officials.

Any place that is close enough to permit a day-long visit and return is close enough to avoid at least some of the time-consuming process which characterises relationships with more distant nations.

While, as I say, the relationships are generally reasonably good, I have a sense that from the New Zealand end (and this is not a criticism aimed just at the current Government) there is room for us to work harder at building the relationships with Australian counterparts.

I want to turn briefly to our role in the Pacific.

The challenges we confront in the Pacific were highlighted somewhat by the interesting referendum result in the Tokelaus last week.

Asked how a vote in favour of independence from New Zealand would have changed the future prospects of the Tokelaus, a Radio New Zealand commentator asserted that independence would have benefited the Tokelaus by giving them access to a wider base of potential donors.

This, to me, seems to sum up rather well the rather directionless strategy that guides New Zealand’s relationships with too many of the Pacific nations.

The most significant initiative that has been taken in recent times by this country in relation to the small Pacific states is to create specific immigration quotas for their citizens to gain residence in New Zealand under the Pacific Access category.

Quite how a programme of denuding small Pacific states of their able-bodied, working-age population is deemed to be part of a strategy to achieve economic sustainability on their parts, is something I struggle to understand.

As a new spokesman in this area I feel no embarrassment about saying that I have no comprehensive solutions to that quite complex problem.

My purpose in raising it today is to signal that this is an area of some interest to my colleagues and I, and that we will be having a careful look at how New Zealand might, both through its own policies and in the context of the Pacific Plan, play a more constructive role amongst the Pacific states, focused particularly on the need to create sustainable economies.

I want to say a few words about the relatively recent arrival of international terrorism as a threat to New Zealanders, particularly those engaged in international travel.

I was somewhat dismayed to be part of the newly constituted Foreign Affairs and Defence Select Committee which was obliged, as a result of a tight legislative timetable, to deliver only a cursory report in its review of the key section of the Terrorism Suppression Act 2002.

What concerned me in briefly hearing evidence on this Act was that important steps to protect New Zealanders from the threat of international terrorism are yet to be taken.

The Act provides powers to restrict the mobility, access to arms and finance, and capacity to communicate of those who are deemed to be terrorists or terrorist organisations under the Act.

While New Zealand has followed its United Nations obligations to formally identify terrorists on the Security Council list under the Act, no additional organisations or individuals have yet been identified in order that the provisions of the Act might apply to them.

Indeed, the Select Committee noted that officials were still working on a process by which this might occur. At the same time, Australia had listed over 80 organisations or individuals on top of those on the UN list, and Canada over 50.

It seems to me that our approach in this regard has been entirely too casual.

It is time some ministers and officials were stirred into a greater sense of understanding of their responsibilities to this country’s security needs.

It is also fair to say that some legislative amendments, which would make this anti-terrorism framework easier to operate, need to be placed before the Parliament with due expedition.

Finally, may I briefly acknowledge, in this audience in particular, that, despite having been in Parliament for a few years, I am a newcomer to foreign affairs, defence and trade. No one is more conscious of how much I need to learn than I am.

I have two very able former MFAT officials, indeed, former ambassadors, in Tim Groser and John Hayes, as my associates.

As a team, we are intent upon using our time in opposition well, to build the relationships and the knowledge, here and abroad, that will enable us to provide good leadership in the foreign affairs and related fields after the next election.

Thank you for your interest.

I look forward to working with you in the time ahead.

ENDS

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